Hard data beats the story of soft data and media
Financial reporting and sentiment investigations continue to argue that the US economy is messing up the brink of a recession. But hard data is a different story.
US economic activity remains strong despite media sticking to disastrous warnings from consumer sentiment surveys. “A recession that never happened” is a politically driven story. The real economy is growing, but politically charged sentiment data remains far behind.
just Listen to Fed Chair Jerome Powelltold reporters this week that economic growth may be easing, but it remains solid.
“Growth appears to be easing a bit. Consumer spending, a bit easing, but still at a solid pace. Unemployment rate of 4.1%. Recently, job creation has reached a healthy level. Inflation has started to rise until now.
Federal Reserve Chair Jerome Powell will speak at a press conference following the Federal Open Market Committee meeting held in Washington, DC on March 19, 2025 (Robert Schmidt/AFP by Getty Images)
His view repeats a recent analysis of Bank of America. The strength of hard data despite the investigation's much more pessimistic picture. “We cannot rely on sentiment research to communicate the state of the economy,” Bank of America noted that despite survey-led pessimism, actual economic activity is lined up.
Housing, industrial production, retail sales and inflation are all improving
The housing begins to roar: In February, homes began a surge of 11.2%, with a seasonally adjusted annual rate of 1.5 million. This is a big jump from the downward revision of 135 million in January. Single-family homes will rise by 11.4% Multi-family construction rose 10.7%, while multi-family construction rose to 111 million a year. Contractors are clearly responding to strong demand despite concerns about mortgage rates and supply constraints.
Existing Home Sales Surge: Existing home sales rose 4.2% in February to a seasonally adjusted annual rate of 426 million, significantly exceeding expectations. Even if prices rise, Buyers are back in the marketdefies claims of economic weakness. The median price rose 3.8% year-on-year to $398,400, marking the 20th consecutive month of price rise.
Industrial production is forgotten first: Industrial production rose 0.7% in February, up more than three times the 0.2% increase expected by economists. Manufacturing output increased by 0.9%based on an 8.5% increase in automobile and parts production. Mining output also increased by 2.8%, contributing to an overall surge.
Retail sales are CA-CHING: After a sharp decline in January, retail sales rose 0.2% in February. More importantly, the “control group” measure of retail sales that is directly supplied to GDP calculations; I climbed to a very healthy 1%. Despite the depressing predictions, consumers are still spending.
Inflation is cooled: Inflation indicators suggest progress in adjusting price pressures. Producer price index remained flat In February, the consumer price index rose just 0.2%, the lowest increase since last August. Egg prices, symbolizing last year's surge inflation, fell 15% in early March.
Behind the discrepancies in hard data software data
It is important to understand why emotional research and economic realities tell two very different stories. University of Michigan's latest research show Consumer sentiment collapses among Democratsperhaps driven by a partisan response to Trump's policies, rather than actual economic hardships. Republican sentiment was buoyed at 95.7, while Democrats' expectations index fell to the lowest ever recorded. Independents are somewhere in the middle.
The truth is that the actual economy is much more resilient than many people willing to admit. What we are witnessing is not the economic deterioration The story of media driven by flawed emotional investigations and politically biased data interpretation.. The “recession that never happened” is already over, and the numbers prove it.
